Most Popular Articles
Each quarter we look at the performance of the top 25 actively managed Most Popular Mutual Funds in the Advisor Perspectives (AP) universe in each of four asset classes. This is the ninth such study; previous studies were done at the ends of Q2 of 2009, Q1 of 2009, Q4 of 2008, Q3 of 2008,  Q2 of 2008, Q1 of 2008, Q4 of 2007, Q3 of 2007, and Q2 of 2007. This study analyzes the most popular funds as of March 31, 2007, and looks at performance during Q3 of 2009 and for the 30 month period ending September 30, 2009. Performance numbers for the 30 month period have been annualized.
The goal of this study, as with prior studies, is to determine whether these actively managed funds outperform their appropriate benchmarks.  Our results so far show that advisors have selected funds which deliver alpha (by outperforming their benchmark) within the foreign equity and municipal bond categories.
Over the 30 month period, foreign equity funds in the AP universe outperformed their benchmark by a significant margin (395 basis points), delivering an average performance of -5.55%, compared to -9.50% for the EFA exchange traded fund (ETF).Â
Of the top 25 foreign equity funds, 19 outperformed their benchmark over this 30 month period, with one funds (AEPGX) outperforming the benchmark in eight of the ten quarters. Another three funds beat their benchmark in seven of the ten quarters.Â
US equity funds outperformed their benchmark (the SPY) by 124 basis points over the 30 month period and by 328 basis points in the third quarter.
Municipal bond funds and taxable bond funds beat their respective benchmarks in the third quarter of this year, but trail their benchmarks over the 30-month period.
The results for Q3 of 2009 are summarized below:
|
Average Return |
Benchmark Return |
Benchmark |
% of Funds Outperforming Benchmark |
US Equities |
18.27% |
14.99% |
SPY |
68% |
Foreign Equities |
18.82% |
19.17% |
EFA |
24% |
Taxable Bonds |
7.97% |
3.61% |
AGG |
80% |
Muni Bonds |
6.97% |
6.75% |
TFI |
40% |
The results for the prior 30 months (annualized) are summarized below:
|
Average Return |
Benchmark Return |
Benchmark |
% of Funds Outperforming Benchmark |
US Equities |
-8.66% |
-9.90% |
SPY |
72% |
Foreign Equities |
-5.55% |
-9.50% |
EFA |
76% |
Taxable Bonds |
3.22% |
6.42% |
AGG |
36% |
Muni Bonds |
3.66% |
5.66% |
TFI |
16% |
Background and Methodology
The Advisor Perspectives universe tracks the investments of high- and ultra-high net worth investors whose assets are managed by Registered Investment Advisors. The size of the universe is approximately $50 billion and the average account size is approximately $900,000. However, 94% of the assets are concentrated in a group of accounts with an average account size of approximately $4 million, so data from the universe is biased by this demographic, and therefore represents the investment decisions of ultra-high net worth investors.
The most popular mutual funds are determined based on the AUM (assets under management) for each fund within the Advisor Perspectives universe. The inception of the Advisor Perspectives service was in Q1 of 2007. The first complete calendar quarter of data was Q2 of 2007.
The funds used in this study were the most popular funds as of March 31, 2007. Only actively managed funds were considered; index funds, enhanced index funds, and ETFs were not included in this study.
To calculate the AUM of each fund, assets are consolidated across all share classes held in the Advisor Perspectives universe. For this study, performance data was obtained for the share class most appropriate for advisors (either a load-waived share class or an institutional share class).
Performance data and style-box classifications were obtained from Morningstar.
Detailed data is presented in the four tables in the PDF file.
Mary Pitek, Operations Manager for Advisor Perspectives, contributed to this report.
Display article as PDF for printing.
Would you like to send this article to a friend?
Remember, if you have a question or comment, send it to .
